Kamehameha Schools will eventually lease the vacant buildings on two three-acre lots in Kakaako, where developers scrapped plans to build at least one luxury condominium tower, the trust’s top executive in its commercial real estate division confirmed to PBN Wednesday.

The state’s largest private landowner is in the midst of concluding matters with The MacNaughton Group and Kobayashi Group, the two developers that planned to build a luxury high-rise tower called Vida 888 at Ala Moana that was shelved because of slow sales. The developers had options to purchase the two parcels.

“We will be looking at leasing opportunities and considering development proposals for those blocks, just as we are with our other remaining blocks in Kakaako,” Walter Thoemmes, managing director of commercial real estate for Kamehameha Schools, told PBN. “At this point, though, our focus is on working with [The MacNaughton Group and Kobayashi Group] on a smooth and orderly transition.”

Kamehameha Schools’ “Our Kakaako” master plan includes nine blocks — four of which are under contract to such developers as Castle & Cooke Hawaii and Stanford Carr Development. Alexander & Baldwin Inc. purchased another parcel, the former CompUSA site, where it is building The Collection condo tower.

Kamehameha Schools, a $11.1 billion trust, is currently in its seventh year of this 15-year plan, which at the start, included seven residential towers that have 2,750 units and 300,000 square feet of commercial space.

Alexander & Baldwin Inc.’s The Collection is one of several residential projects underway in Kamehameha Schools’ ‘Our Kakaako’ plan

As Kamehameha Schools enters its sixth year in its 15-year “Our Kakaako” master plan, which covers nine blocks mauka of Ala Moana Boulevard in Honolulu, there may be some parts of the development that will be utilized for “interim uses,” the chair of the trust’s board of trustees told PBN.

Lance Wilhelm, chairman of Kamehameha Schools’ Board of Trustees, said that interim uses describes the trust’s leasing activities within the blocks not yet under construction.

He noted that in those circumstances, as it has done with some of the retail frontage in what will eventually become “Salt at Our Kakaako,” Kamehameha Schools was able to find small businesses that needed flexible space either to incubate an idea or launch a new concept.

“Those uses, while relatively short term, help create excitement and bring new energy to a space that might otherwise sit dormant for an extended period of time,” Wilhelm, the former Kiewit Hawaii executive who is now managing principal for California developer Irongate, told PBN in an email. “Ultimately, it will be the market that dictates the exact nature and timing of any development activity in Our Kakaako, and that market remains very strong today.”

“[These] are examples of the active developments we expect to help bring life to Our Kakaako and support Kamehameha’s educational mission,” Wilhelm said. “All nine blocks continue to be planned for development in conformance with the entitlements that are in place, and most of them are already under active construction or in preparation for same.”

A rendering of one of several “Our Kakaako” residential projects in the growing Honolulu neighborhood.

Kamehameha Schools, Hawaii’s largest private landowner, and one of the major developers of the growing Honolulu neighborhood of Kakaako, probably won’t develop all of the parcels in its “Our Kakaako” plan — at least during this current economic cycle — the chairman of the $9.2 billion trust’s board recently said at a construction industry event.

“These [remaining] blocks will be [utilized] for interim uses,” said Lance Wilhelm, managing member of California-based Irongate and chairman of the board of trustees for Kamehameha Schools.

Thus far, the trust, which is one of the larger landowners in Kakaako, has contracted with some of the state’s most well-known developers, including Alexander & Baldwin, Castle & Cooke Homes Hawaii, Stanford Carr Development, The MacNaughton Group and Kobayashi Group, to build housing projects on those parcels.

Castle & Cooke Inc. will join Hawaii developers such as Alexander & Baldwin Inc. and Stanford Carr Development in developing a residential condominium project in Kakaako as part of landowner Kamehameha Schools’ “Our Kakaako” master plan.

Anthony Ching, executive director of the Hawaii Community Development Authority, the state agency charged with redeveloping Kakaako, confirmed to PBN that Castle & Cooke would build reserved housing units along Keawe Street between Pohukaina and Auahi streets, Diamond Head of Waterfront Towers.

Castle & Cooke, which is best known for building single-family residential projects, such as Mililani and the recently approved 3,500-home Koa Ridge project, both in Central Oahu, would be stepping into somewhat unchartered waters with this condo project.

“Castle & Cooke being interested shouldn’t be surprising,” Ching said. “Everyone needs to produce inventory to sell. You have to put stuff in the pipeline.”

He also pointed out that the demand for housing is at a fever pitch and that more inventory is greatly needed.

“Urban Honolulu is going to be an attractive area,” Ching said. “Many of our local developers are not into luxury, maybe mid-market or low market.”

The parcel currently has several businesses on it, including Volcanic Rock Gym.

Larry Hurst, chairman of the board, told PBN that the planned project isn’t a high-rise, and instead consists of six stories.

“It’s a good thing,” he said. “They’re looking for a variance on their parking structure.”

Kamehameha Schools did not immediately responded to a request for comment by PBN.

But Bruce Barrett, executive vice president of Castle & Cooke Homes Hawaii, told PBN that the developer is in discussions with Kamehameha Schools for the Keawe Street project.

“Discussions are ongoing and we expect to be able to make a formal announcement within the next 60 days,” he said in an email statement to PBN.

The Kamehameha Schools’ Kakaako master plan, which includes nearly 30 acres and nine full-block parcels with 2,750 residential units and commercial space, is beginning to take shape.

In September, PBN first reported that MK Development, a joint venture of well-known Hawaii developers the Kobayashi Group and The MacNaughton Group, is purchasing six acres in Kakaako to develop two luxury mixed-use housing projects totaling about 500 units.

HAWAII AMERICANA REALTY

For the past 14 years, Mark G. Howard has practiced his skills as a licensed Realtor in Santa Fe, New Mexico, Las Vegas, Nevada and now Principal Broker & President of 'Hawaii Americana Realty', in Honolulu, Hawaii. He has gained a competitive edge in the real estate market by earning his status as an Accredited Buyer’s Representative (ABR).